The levy, being pushed by publishers, would require search engines to pay each time they link to media content including newspaper articles or photographs.

After a debate that began close to midnight, Parliament said in the early hours of this morning that the matter was passed on to its legal committee. There was no immediate word on when the committee may issue recommendations.

A spokeswoman from the Bundestag explained: "After the first reading the draft will be sent to parliamentary committees. After debates in the committees the second and third readings (voting) take place in the plenary".

Google launched a campaign on November 27 dubbed "Defend Your Net" aimed at drumming up support to defeat the measure.

In the short online video, Google warns "for more than 10 years you've been able to find what you are looking for." A planned law, it says, "would change that."

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The proposals would effectively extend copyright so Google, which has an almost complete monopoly on the German web search market, would pay to index and link to newspaper and magazine material online.

Like news publishers across the Western world, the German industry has been battered by economic forces and the gradual shift of readers from print to the web, where advertising rates are typically much lower.

Google does not publicly disclose how much it makes from Google News, but in 2008, its head of search Marissa Mayer, who left this year to become chief executive of Yahoo!, estimated the annual revenues at $100m. The figure is likely to have grown significantly since then, in line with increasing online news consumption.